Financial Accounting

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Periodic Inventory System Purchase and Sale


ProductiveLearning Inc. used the periodic inventory system for the following transactions during January, 2015.

1/1 Purchased accounting exercise books on account for \$500 from the University Bookstore
1/12 Sold the exercise books for \$500 cash
1/13 Paid the University Bookstore \$500 for the purchase on 1/1

(I): On 1/1, which account should ProductiveLearning Inc. debit when recording the purchase?

(II): On 1/12, the company debited Cost of Goods Sold \$500 and credits Sales Revenue \$500. Is this correct?